European Union regulators will approve plans by British mobile operators Vodafone (Newbury, UK), O2 (London, UK) and Everything Everywhere (London, UK) to set up a joint venture to allow users to make payments and purchases with their phones, a person following the deal said on Tuesday.

The mobile wallet scheme, called Project Oscar, allows users to use their mobile for transactions instead of cash or cards. It can also be used by retailers, banks and advertisers.

The European Commission, which has been examining the plan since March, is expected to give approval this week, ahead of a September 19 deadline, said the person, who declined to be identified because of the sensitivity of the matter.

"It will be unconditional clearance," the person said.

The Commission declined to comment.

Critics such as Hutchison Whampoa's Three (London, USA), the smallest telecoms provider in Britain, said the proposed mobile wallet would give the three partners a monopoly in mobile "push" advertising and mobile payments.

Mobile payments are common in Japan and South Korea, as well as in some developing countries where many people do not have bank accounts, but where mobile phones are widespread.